Of all the important research done by Baseball Prospectus, none may ultimately have been more influential than the late Doug Pappas' work with regard to team salary and performance. The metric Pappas created, Marginal Dollars per Marginal Win, showed the plucky Oakland Athletics to be doing a better job managing their (limited) financial resources than anyone else. Author Michael Lewis took note, began investigating what the A's were doing differently from the rest of baseball, and you know the outcome.

A quick explanation of my method: The NBA makes the computation of a minimum salary easy because in addition to the salary cap, there's also a salary floor that rarely comes into play. (I believe the Clippers had to make a trade to get over the floor early in the decade, but it hasn't been an issue any time since.) The minimum salary is 75 percent of the salary cap each year, so we can simply use that figure. As for the wins side, I've used ten wins as the floor. Only once in the NBA's history--the 1972-73 Philadelphia 76ers--has a team failed to reach ten wins, though the 11-71 1992-93 Dallas Mavericks made an impressive run at the record. While a team entirely made up of replacement players might be able to do worse, in practical terms ten wins is as bad as anyone is ever going to get.

Of course, because of the mechanics of the NBA's combination of a soft salary cap and guaranteed contracts, it can be difficult to change a team's payroll dramatically in a hurry. So it is that the Oklahoma City Thunder, for example, have a payroll around $68 million this season. GM Sam Presti has maneuvered the Thunder in position to be under the cap starting this summer, but because the contracts of players like Malik Rose, Donyell Marshall and Joe Smith are still on the books (the latter two players having been bought out), Oklahoma City technically has an average payroll.

All of that salary-cap weirdness makes the Marginal Dollars per Marginal Win concept a little more difficult to apply in the NBA on a single-season basis. In essence, by acquiring ending contracts and draft picks, the Thunder is paying now in order to improve its Marginal Dollars per Marginal Win in future years. Keep that in mind as we look first at this year's results before taking the longer-range view.

Who would have guessed, when the Magic signed Rashard Lewis to a lucrative deal and extended Jameer Nelson's contract, that a season later they would be the most economically efficient team in the NBA? Yet with the pieces fitting together perfectly and Orlando getting production from bargain youngsters like Courtney Lee and Marcin Gortat, GM Otis Smith has put together a championship contender for a payroll that comes in right around average. The other three elite teams in the league are all well into luxury-tax territory, though the Lakers and Boston have still spent their money very effectively, all things considered.

Few teams manage their cap better than the Jazz does, although that position may be tested when Paul Millsap hits the free-agent market this summer and Carlos Boozer has the option of joining him. San Antonio has also done a great job of winning championships without breaking the bank. Having Tim Duncan, Manu Ginobili and Tony Parker all on reasonable contracts has helped that process.

At the other end of the spectrum, the Knicks have some company in terms of poor return on their money. Sacramento and Washington aren't well above that ten-win floor, and both are near average in terms of payroll. The Kings took steps at the deadline to get under the cap this summer, but Washington projects to be over the luxury tax. The hot rumor in February was that the Wizards would package their lottery pick with some of their bad contracts in order to keep together a core that has won a playoff series as currently constructed. Interesting.

In addition to looking at this year's results, I also went back through 2005-06 to fill in the gap through what had previously been done. Here are the best Marginal Dollars per Marginal Wins figures in that span:

Note that I've thrown out the 2005-06 Bobcats because, in their second year as an expansion team, they were working with a reduced salary cap that throws off the calculation. Even in year three, Charlotte was very efficient, winning a respectable 33 games with a payroll not far above the salary floor. Alas, adding additional wins has proven more challenging and far more costly the last two seasons. The 2005-06 New Orleans Hornets benefited from adding some rookie named Chris Paul. The best management job on this list might have been the 2006-07 Raptors. In his first full year in Toronto, Bryan Colangelo imported low-cost contributors Jose Calderon, Jorge Garbajosa and Anthony Parker to get the Raptors back to the playoffs. Alas, things have fallen apart quickly since then.

Hey, look at that--some Knicks teams! Who would have guessed? Yes, the 2005-06 Knicks set a standard for cap excess that may never again be challenged in this new era of fiscal sanity, spending nearly $7 million for each of their 13 marginal wins. Despite a significantly lower payroll, last year's Miami Heat squad, which finished 15-67, were little more efficient in winning just 15 games.

If we discount the Bobcats, the Hornets have spent their money the most efficiently in the last four years, a span which, not coincidentally, includes the entirety of Chris Paul's rookie contract. With Paul more appropriately valued next season, New Orleans has financial issues arising from Peja Stojakovic's big pact and the midlevel deals handed out to Morris Peterson and James Posey the last two summers. That appeared to cost the Hornets Tyson Chandler, and may yet do so this summer. That's how thin the line is between salary cap success and failure in the NBA.

Detroit, San Antonio, Utah and Phoenix get credit as the teams that have consistently won without high payrolls. The Suns are beginning to slip in this regard and face their own tax woes after also ending up quiet at the trade deadline for very different reasons from the Hornets.

At the bottom, we find as expected the three biggest luxury-tax payers in the league--Dallas, Portland and New York. The Blazers have become much more fiscally responsible and should be much more efficient next season when the contracts of Steve Francis and Raef LaFrentz are off the books. The Mavericks have hardly struggled in the last four years, advancing to the NBA Finals in that span, but Mark Cuban has spent a lot of money on his team.

The surprise here is that Minnesota snuck in as the second-worst spenders of the last four years, ahead of only the Knicks. They've been bad without ever being able to cut their payroll a la Memphis or Atlanta. Something similar is true of Milwaukee, while Philadelphia has had above-average payrolls without above-average results before this season.

Alas, these numbers don't reveal anyone as singularly effective as the A's in baseball. Because the salary cap tends to cluster payrolls together and because young players are under team control for less time, it's harder to build a consistently build a contender on the cheap. Nonetheless, smart cap management and salary efficiency is a big reason why teams like Detroit and San Antonio have extended their runs as long as they have.

Kevin Pelton is an author of Basketball Prospectus.
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